Mondelēz considering changes at Chicago bakery

by Eric Schroeder
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The Chicago bakery makes Chips Ahoy! and Oreo cookies and other snack foods.

CHICAGO — Mondelēz International may be eliminating several hundred jobs at its Chicago bakery, but first the company must decide where it will put $130 million worth of new biscuit manufacturing lines. One thing is clear, the bakery, which makes Chips Ahoy! and Oreo cookies and other snack foods, will remain an important site in the Mondelēz network.

“The bakery will not close; the bakery is an important part of the network,” said Laurie Guzzinati, senior director of corporate and government affairs for North America, Mondelēz. “There is an opportunity to invest, and no decisions have been made.”

Ms. Guzzinati said Mondelēz is debating whether to invest in the Chicago facility, which opened in the 1950s and was remodeled in the early 1990s, or in a new facility in Salinas, Mexico.

If the investment takes place in Chicago, 4 new lines would be put in place to replace 9 older existing lines — the facility currently operates 16 lines. Putting the lines in Chicago would cost Mondelēz about $46 million in annualized operating costs and capital expenses, she said.

“In either scenario, there will be impact to employees and to the lines in the Chicago bakery,” Ms. Guzzinati said. “If the Chicago bakery were to be selected for the full investment, we are currently projecting reductions of approximately 300 positions in Chicago. If the investment is made in Salinas, we are currently projecting reductions of approximately 600 positions in Chicago.”

Mondelēz has not set a deadline to make a decision on the fate of the bakeries.

In early 2014, Mondelēz unveiled plans to support priority cookie and cracker brands and product platforms through an investment of more than $130 million in new biscuit manufacturing technology and capabilities in its U.S. network. That investment included a focus on bakeries in Fair Lawn, N.J., and Richmond, Va. Consolidating its U.S. biscuit manufacturing footprint on the East coast will result in the closing of company’s Philadelphia bakery in 2015.
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